Types of Residential Properties for Investment
Real estate investing, even on a very small scale, remains a tried and true means of building an individual’s cash flow and wealth. – Robert Kiyosaki
Apartments: Very common types of housing that could be seen and built across the country. These apartments are built by reputed developers, local developers and independent house owners. As a result, there is no standard features or amenities that could be expected when we say apartment. Most places in Bangalore apartments give 3% rental returns (after 5 years) and a capital appreciation of around 15% per annum ( doubling in value in 5 years) – total return of 18% p.a. – Minimum investment required is Rs. 60 to Rs. 80 lakhs, 80% can be through loans
Independent houses: Indian tradition believes in this type of housing and we all can understand relate to this type of housing.Off late, the popularity has gone down due to limited inventory. Typical rentals are 2-3% ( 5 years after purchase) and capaital appreciation of 20% plus – Typical investment required is Rs. 80 to Rs. 120 lakhs – 80% can be through loans
Residential Plots: Purchasing land to build independent houses or apartments. Again this is one of the traditional ways of investing in real estate. In India this form of investment has shown great returns on investment. Superior returns 20% per annum, no rental value – Typical investments could be Rs. 25 lakhs and above and value doubles 3 -5 years
The following types of housing have become popular in the recent years. As a result the appreciation and rental information is sparse.
Villas: Recent introduction but has become popular among the NRIs. This semi-detached residential housing provides the best of both worlds in the sense of independent house while at the same time having the amenities of the apartment.
Villaments: Newest investment type which is a marriage between the Villa and apartment. Here you share the yard with the villa above. Four houses attached in such a way that there is a sense of independence but sized like an house. The theory behind villaments has been to provide the same luxuries as in a villa and yet retain the flavor of coziness provided by an apartment. Villaments are structured over an area of 3000 sq. ft. to 3500 sq. ft. which comprises of a garden space of around 600 sq. feet to about 1,250 sq. feet. It has been priced the villaments at a range of Rs.1.5 crores to Rs.2 crores each.
Farmhouses: These are nothing but your grandpa’s house in the village. Due to the burgeoning pollution and lack of greenery, people have moved out of the city and created these living spaces. You will get an acre or more land with garden where you can grow vegetables, fruits etc., and get modern amenities like the swimming pool.